New year brings changes to Medicare

Saturday

Readers of this column usually see me take a conservative stance about something currently taking place on the political scene. However, this month, I’m looking specifically at Medicare.

Readers of this column usually see me take a conservative stance about something currently taking place on the political scene. However, this month, I’m looking specifically at Medicare.I’m not writing about it because it’s one of the forbidden “third rails” of politics and, from a cost perspective, appears likely to be unsustainable in the future, but because it impacts about 30 million seniors in America as well as a large segment of our local population in Western North Carolina.We all know that health care is an enormous part of our political landscape, and just a few weeks ago the 2015 deadline for Medicare open enrollment passed. If you were already on Medicare, any changes you wished to make to your 2015 Medicare health care coverage had to be completed by Dec. 7.Most Medicare recipients were notified by their insurance companies about the medical health insurance options and available plans, not to mention the hundreds of health care-related commercials that bombarded our television viewing. Plans mentioned ranged from traditional Medicare to Medicare Advantage (MA) plans with multiple choices for prescription drug plans (PDPs), and many people realized that health care plan shopping can be very confusing.It’s important that you know that if you had a Medicare plan in 2014, kept it and made no changes, you will automatically retain that plan for all of 2015, including any price or rule modifications that were made by the insurance company.A growing number of our citizens will celebrate their 65th birthdays this year, and this article will attempt to explain some of the complexities and provide some guidance for those who will soon become eligible for Medicare. Of course, I can’t know or explain everything, but understanding some basics that are part of the current program will be helpful.For those already on Medicare who didn’t do any research into possible modifications to your existing coverage, there are some scheduled changes you can expect see in your 2015 plans.In Henderson County, there are three companies offering nine MA plans with PDPs as well as three MA plans without PDPs. They are UnitedHealthcare (AARP), Humana, and Blue Cross and Blue Shield (BCBS).A few zero-premium MA plans are available, but expect those numbers to diminish in future years. Also, keep in mind that traditional Medicare does not include a prescription feature, but there are 28 PDPs from which you may choose.In 2015, one of the first surprises for some beneficiaries who did not make changes to their existing MA plans will be a $7 per month premium increase — about 20 percent more money per month directly out of your pocket than last year.

One of the attractions of MA policies is that they stipulate the limit of out-of-pocket expenses that you may have to pay under Medicare Part A (inpatient hospital), Part B (outpatient physician fees and services) and Part D (prescriptions). The traditional Medicare program does not state a limit on your out-of-pocket spending for services covered under Parts A and B.This is one reason many beneficiaries with traditional Medicare opt to purchase supplemental coverage. It helps limit the financial liability they will incur under Parts A & B. Nevertheless, even with MA coverage, expect your 2015 out-of-pocket limits to be approximately $240 higher on average than they were in 2014.Now let’s look at PDPs. Most have an initial coverage deductible amount of $320 that you must meet before the plan begins to pay for your prescriptions. Some plans may offer a reduced deductible, but expect to pay more this year than you did in 2014 for the majority of PDPs.There may also be changes to the copayment amounts of your PDP. A copayment is your share of the cost of your prescriptions. The amount is based on the tier or classification level that the drug has been given within your plan, from Tier 1 for generics to Tier 4, the more costly drugs prescribed for catastrophic diseases like cancer.Copayments may also be required on every prescription you fill, even after you meet the required deductible amount.Virtually all PDPs have a coverage gap, affectionately known as the “doughnut hole.” This means there’s a temporary limit or cap on the amount that your drug plan will pay toward your prescription drugs. If the total of your out of-of-pocket expenses combined with the amount your drug insurance plan paid reaches $2,960 this year, you will fall into the insurance gap.While in the drug payment gap, you’ll pay 45 percent of the plan’s cost for covered brand-name prescription drugs and 65 percent of the cost of generic drugs, and you’ll remain in the “doughnut hole” until you’ve paid an additional $1,740 for a total personal and plan combined out-of-pocket expense of $4,700. Thereafter, you automatically qualify for “catastrophic coverage” that requires you to pay a small coinsurance amount or copayment for covered drugs for the remainder of the year.These are confusing times in health care insurance, especially for many seniors. I hope this provided some explanations and guidance to assist you through the maze that is Medicare in 2015.

Ron Kauffman is a Hendersonville resident. You can reach him at conservativewnc@gmail.com.

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